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Crude Edges Higher With Focus on Global Demand and Middle East Risks


Crude markets are regaining some ground after falling yesterday with no signs yet that the Israel ground offensive has caused an escalation of the conflict to the wider Middle East region. Israeli PM Benjamin Netanyahu yesterday said that Israel will not agree to any ceasefire with Hamas.

    • Brent JAN 24 up 0.5% at 86.81$/bbl
    • WTI DEC 23 up 0.6% at 82.82$/bbl
    • Gasoil NOV 23 up 0.6% at 871$/mt
    • WTI-Brent up 0.07$/bbl at -5.26$/bbl
  • Energy markets are weighing the upside price risk of any supply disruption from Iran despite no significant involvement so far against concern for global demand. The latest China Manufacturing October PMI showed a downside surprise back to mid year levels at 49.5 adding to uncertainty over the strength of the China economy towards year end.
  • Weak oil products demand is also weighing on markets ahead of the latest US Fed and BOE central bank meetings later this week.
    • Brent JAN 24-FEB 24 up 0.04$/bbl at 0.77$/bbl
    • Brent DEC 23-DEC 24 down -1.06$/bbl at 6.48$/bbl
  • Backwardation remains supported by OPEC+ supply cuts but most time spreads drifted lower yesterday following the weaker flat price with volatility in the Brent Dec23-Jan24 spread ahead of the Dec23 contract expiry today.
  • Gasoline cracks yesterday reversed earlier gains to be down slightly on the day, while diesel spreads are also falling this month amid weak fuel demand. Diesel cracks remain relatively robust compared to historical levels amid low stocks and tight supplies ahead of the winter heating season.
    • US gasoline crack up 0$/bbl at 10.81$/bbl
    • US ULSD crack up 0.1$/bbl at 39.3$/bbl

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